Resmed Inc. · NYSE:RMD
Resmed — Q1 2020 Earnings Presentation
50 slides from Resmed's earnings presentation, Oct 24, 2019
Slide 1: Investor Presentation Q1 2020
Investor Presentation Q1 2020 October 24, 2019
Slide 2: Presentation of financial information & forward-looking statements
Presentation of financial information & forward-looking statements Historical financial and operating data in this presentation reflect the consolidated results of ResMed Inc., its subsidiaries, and its legal entities, for the periods indicated. This presentation includes financial information prepa
Slide 3: Company Overview & Strategy
Company Overview & Strategy Main Headline Goes Here © 2019 ResMed I Q1 2020 Investor Presentation I 3
Slide 4: Who we are / what we do
Who we are / what we do • Listed on NYSE & ASX, ~$18B market cap • World-leading connected health company with over 10 million 100% cloud-connectable devices – More than 11 million patients in AirView monitoring ecosystem – More than 90 million patient accounts in out-of-hospital care network • Inno
Slide 5: Why invest? – driving long-term shareholder value
Why invest? – driving long-term shareholder value Market Dynamics Growth & Innovation Financial Results • Underpenetrated markets in • Global leader in connected • Historical revenue and profit sleep and COPD health for sleep and growth respiratory care • Healthcare costs continue to • Recurring rev
Slide 6: Key demographic, political, and healthcare trends present multiple opportunities
Key demographic, political, and healthcare trends present multiple opportunities for ResMed Healthcare continues to rise in importance as a major topic on social and political agendas around the world. Increasing Chronic Aging Healthcare Costs Physician MACRO Disease Burden Population Growing Shorta
Slide 7: ResMed 2025 Strategy: Patient-centric, digitally enabled strategy
ResMed 2025 Strategy: Patient-centric, digitally enabled strategy 250 million lives improved in out-of-hospital healthcare in 2025! Purpose Empower people to live healthier and higher quality lives in the comfort of their home Growth Focus Global health epidemics in sleep apnea, COPD, other major ch
Slide 8: Our Business - Sleep
Our Business - Sleep © 2019 ResMed I Q1 2020 Investor Presentation I 8
Slide 9: Sleep business strategy
Sleep business strategy Deliver a world-class patient experience through innovative solutions that lower overall costs for treating sleep apnea patients and improve clinical outcomes OPTIMIZE DELIVER BEST-IN- EMBRACE AND ENABLE EFFICIENCIES FOR CLASS PATIENT INTEGRATED CARE PROVIDERS EXPERIENCE MODE
Slide 10: What is sleep-disordered breathing?
What is sleep-disordered breathing? • Abnormal respiration during sleep – the cessation of breathing or “sleep suffocation” • Most prevalent is obstructive sleep apnea – collapse of the upper airway despite ongoing effort • Other types include central sleep apnea -- lack of breathing and lack of eff
Slide 11: The global prevalence of sleep apnea is enormous and growing
The global prevalence of sleep apnea is enormous and growing… AHI ≥ 5 AHI ≥ 15 Benjafield, et al. Lancet Respir Med 2019 936,360,689 424,630,028 © 2019 ResMed I Q1 2020 Investor Presentation I 11
Slide 12: Sleep apnea is more than 80% undiagnosed
Sleep apnea is more than 80% undiagnosed…. ….and is highly prevalent in other chronic conditions Stroke1 72% Atrial Fibrillation4 74% Heart Failure5 76% Type 2 Diabetes2 Drug-Resistant Hypertension6 72% 83% Obesity3 77% 1 Peppard PE et al. Am J Epidemiol 2013 1 Johnson KG and Johnson DC. J Clin Slee
Slide 13: New research demonstrates dose response of PAP therapy
New research demonstrates dose response of PAP therapy For every one hour per night increase in PAP usage there was an 8% decrease in inpatient visits and a 4% decrease in overall visits1. Each 8% Hour 4% PAP Inpatient Overall Visits Usage Visits 1. Inpatient, ED, and observation visits Kirsch et al
Slide 14: Transforming the treatment & management of sleep apnea
Transforming the treatment & management of sleep apnea Quiet Compact Comfortable Connected Minimalist Ultra Soft Small. Light. Simple. Patented memory foam offers unique comfort. Freedom Universal Fit Sleep in any position. Classic designs that fit nearly every face. © 2019 ResMed I Q1 2020 Investor
Slide 15: Working with others to raise sleep as a public priority
Working with others to raise sleep as a public priority Our sleep research joint venture with Verily • Develop software solutions to help • To study the health and financial identify, diagnose, treat and manage impacts of untreated sleep apnea those with OSA ‒ Prove the ROI for treating OSA Identify
Slide 16: Our Business – Respiratory
Our Business– Respiratory MainCare Headline Goes Here © 2019 ResMed I Q1 2020 Investor Presentation I 16
Slide 17: Respiratory care strategy
Respiratory care strategy Changing the lives of COPD patients by bringing new solutions for unmet patient needs INNOVATE AND EXPAND TRANSFORM COPD WIN IN THE CORE INTO ADJACENCIES HEALTHCARE DELIVERY • Reach more COPD patients through • Treat patients earlier in COPD disease • Build intelligent ther
Slide 18: What is chronic obstructive pulmonary disease (COPD)?
What is chronic obstructive pulmonary disease (COPD)? COPD is a serious lung disease that over time, makes it hard to breathe Causes include: • smoking, vaping, & second hand smoke • a history of childhood infections (could be a catalyst) • pollution • genetic inheritance, leading to its onset • occ
Slide 19: COPD is a large and growing market
COPD is a large and growing market • COPD is the third leading cause of death worldwide1 • More than 380 million people worldwide are estimated to have COPD2 –Largely undiagnosed COPD sufferers in high-growth markets such as China, India, Brazil and E. Europe may be well over 100 million3 • Cost to
Slide 20: There is a need for end-to-end solutions for COPD patients
There is a need for end-to-end solutions for COPD patients Global population of COPD patients: ~380 million1 Self-management (Smoking Cessation, Diet, Exercise) Inhaled Pharmaceuticals for COPD Oxygen Ventilation 20% <1% of pop. 75% of pop. of pop. Increasing severity of disease COPD Stage I Stage I
Slide 21: Full spectrum of solutions for respiratory care
Full spectrum of solutions for respiratory care Digital Therapeutics High-Flow Therapy Portable Oxygen Concentrator Propeller AcuCare™ high flow Mobi™ Bilevel Ventilation Non-invasive Ventilation (NIV) Life Support Ventilation AirCurve 10™ Lumis™ Stellar™ Astral™ Astral™ with RCM Patient Acuity © 20
Slide 22: Propeller’s digital medicine platform drives reduced healthcare utilization
Propeller’s digital medicine platform drives reduced healthcare utilization Results: Study Overview: Cleveland Clinic enrolled people into Propeller as part of their routine clinical care and monitored them for at least one year. Providers monitored drug use and adherence to inhaled controller medic
Slide 23: Our Business – Software as a Service (SaaS)
Our Business – Software as a Service (SaaS) © 2019 ResMed I Q1 2020 Investor Presentation I 23
Slide 24: SaaS Strategy
SaaS Strategy Better patient experience. Improved clinical outcomes. Lower overall cost of care. • Single view of the patient • Comprehensive interoperability • Care transition, coordination and collaboration • Seamless access to information for patients and those who care for them • Manage populati
Slide 25: Our SaaS portfolio…
Our SaaS portfolio… © 2019 ResMed I Q1 2020 Investor Presentation I 25
Slide 26: …supports a broad portfolio of out-of-hospital verticals
…supports a broad portfolio of out-of-hospital verticals Loved One/ Caregiver $$ Payor Patients and Residents Hospital Physician MatrixCare Home Health Hospice Private Duty Skilled Senior Living Life Plan Nursing Community Brightree HME Providers ResMed Sleep and RC Products & Solutions © 2019 ResMe
Slide 27: Strong positioning within key segments
Strong positioning within key segments • Brightree – #1 in HME market with opportunity to grow • Moving upmarket in Home Health and Hospice (HHP) with Brightree and HEALTHCAREfirst combined offering managed by MatrixCare • HHP platform recently named the preferred solutions partner by Cerner, a lead
Slide 28: SaaS portfolio is operating at scale and creating value
SaaS portfolio is operating at scale and creating value Portfolio is financially attractive on its own Supports growth for and with leading existing businesses positions in key (HME) and chronic segments. diseases, sleep apnea and COPD in particular. Breadth and scale creates our competitive advanta
Slide 29: Digital Health Technology
Digital Health Technology © 2019 ResMed I Q1 2020 Investor Presentation I 29
Slide 30: Digital health technology supports all of ResMed
Digital health technology supports all of ResMed Purpose: Enable all ResMed businesses to achieve their business objectives by leveraging Healthcare Informatics technology and Advanced Analytics. Sleep Respiratory Care SaaS Digital Health Technology Technology + Advanced Analytics © 2019 ResMed I Q1
Slide 31: Digital health technology strategy
Digital health technology strategy Connected Health Ecosystem Data Analytics – The AI/ML Journey • Innovate for core Sleep and RC business • Drive better clinical outcomes for patients and ‒ Device connectivity to the cloud business outcomes for providers ‒ Patient monitoring and management • Levera
Slide 32: We transform 5+ billion nights of medical data into useful outcomes
We transform 5+ billion nights of medical data into useful outcomes End-to-end connected health solutions in sleep, respiratory care, and out-of-hospital healthcare 3rd Party Diagnostics DIAGNOSIS THERAPY MONITORING & MGMT. PATIENT ENGAGEMENT BILLING & INTEGRATIONS © 2019 ResMed I Q1 2020 Investor P
Slide 33: Global leadership in digital health
Global leadership in digital health AirView™ has over 10+ million 100% cloud connectable 11 million patients devices worldwide 1 million+ diagnostic tests ~93 million accounts in processed in the cloud out-of-hospital care network ~100 API calls per 2 million+ patients have second from integrators s
Slide 34: Recent financial results
Recent financial results Main Headline Goes Here © 2019 ResMed I Q1 2020 Investor Presentation I 34
Slide 35: Q1 FY20 financial results
Q1 FY20 financial results Diversified revenue by business & by geography OOH SaaS 1Q20 13% $681.1M Revenue +16% (+17% CC) Masks and Devices Accessories 59.5% 37% 50% Gross margin +120 bps $191.0M Non-GAAP operating income* +22% $0.93 Non-GAAP EPS* 15% Europe, Asia and Other Free cash flow $139.7M 33
Slide 36: Track record of disciplined financial growth
Track record of disciplined financial growth Non-GAAP Revenue ($B) Operating Income ($M) Non-GAAP EPS 11% CAGR 13% CAGR 9% CAGR $3.77 $2.7 $750 $2.47 $1.6 $411 LTM 1Q15 LTM 1Q20 LTM 1Q15 LTM 1Q20 LTM 1Q15 LTM 1Q20 Fiscal Years ended June 30 © 2019 ResMed I Q1 2020 Investor Presentation I 36
Slide 37: Recognized by Forbes as #1 in our category for corporate citizenship
Recognized by Forbes as #1 in our category for corporate citizenship Increased awareness Eliminating Responsible Minimizing pollution Product stewardship and continual unnecessary waste compliance improvement We work to eliminate We are minimizing We design and develop We fulfill all relevant and We
Slide 38: In the last 12 months, we changed approximately 15 million lives
In the last 12 months, we changed approximately 15 million lives with our products and improved 93 million more via our out-of-hospital care network Our aspiration is to improve © 2019 ResMed I Q1 2020 Investor Presentation I 38 250 million lives in 2025
Slide 39: ResMed is the global leader in connected health
ResMed is the global leader in connected health Market Dynamics Growth & Innovation Financial Results • Underpenetrated markets in • Global leader in connected • Historical revenue and profit sleep and COPD health for sleep and growth respiratory care • Healthcare costs continue to • Recurring reven
Slide 40: Thank you
Thank you Contact Investor Relations Phone: (858) 836-5971 Email: investorrelations@resmed.com Website: investor.resmed.com © 2019 ResMed I Q1 2020 Investor Presentation I 40
Slide 41: APPENDIX
APPENDIX © 2019 ResMed I Q1 2020 Investor Presentation I 41
Slide 42: Turning big data into actionable information
Turning big data into actionable information Pioneering innovation and providing clinical evidence that support better patient outcomes and improved business efficiencies for customers Labor World’s largest study for adherence % Costs2 59% 21 patient adherence with automated > 128,000 patients compl
Slide 43: Improving adherence to therapy
Improving adherence to therapy ResAdhere: remote monitoring + mask resupply drive improved adherence In a study of ~100k patients with AirView cloud-connected devices… 100 100% Probability on Therapy (%) 84% 66% 0 Resupply group (AirView + Brightree) 90 360 Control group (non-resupply) Time to Drop
Slide 44: Big data analysis drives insights for treatment of central sleep apnea
Big data analysis drives insights for treatment of central sleep apnea Patients with treatment-emergent central sleep apnea (CSA) are two times more likely to terminate therapy • Opportunity to rethink conventional therapeutic options • Minimize risk of therapy termination through early diagnosis •
Slide 45: Reducing mortality with PAP therapy
Reducing mortality with PAP therapy U.S. multicenter, population-based cohort study • Positive airway pressure therapy associated with a 62% lower risk of all-cause mortality • Death rate was twice as high for persons who did not receive positive airway pressure therapy ‒ (24.7 vs 12.8 deaths per 10
Slide 46: Opportunity to shift care from hospital to home
Opportunity to shift care from hospital to home • Healthcare costs are on the rise • Combining non-invasive ventilation (NIV) with home oxygen therapy (HOT) − Reduces hospitalization and mortality by 51% − Increases time to hospital readmission or death by ~90 days Admission-free survival by treatme
Slide 47: Respiratory Care: Our point of view
Respiratory Care: Our point of view • People with COPD are not well served by healthcare systems today ‒ Better solutions are needed for patients, physicians, care providers, and payers • Technology enabled medical devices will be incorporated within integrated care models to more effectively manage
Slide 48: Digital health solutions for inhaled COPD pharmaceuticals
Digital health solutions for inhaled COPD pharmaceuticals Acquired Propeller Health in January 2019 • ResMed now has end-to-end solutions for Digital Health for • Establishes ResMed as a leading provider of COPD and COPD patients across stages I, II, III, IV of the disease asthma patient management
Slide 49: Propeller has demonstrated compelling clinical outcomes
Propeller has demonstrated compelling clinical outcomes Impact of the Propeller solution tracking inhaler usage and location SABA use over time Symptom free days Healthcare utilization # per day % Events -25% 79 2.0 +32% 75 59 1.5 -50% 50 1.0 0.5 25 Uncontrolled 0.0 0 COPD 0 50 100 150 200 0 50 100
Slide 50: History of successful SaaS acquisitions
History of successful SaaS acquisitions Company Location Date Key Product Status Halifax, NS Aug 2012 U-Sleep Integrated into AirView. Canada Knoxville, TN Feb 2015 GoJaysec Rebranded as GoScripts. Denver, CO Jul 2015 CareTouch 360 Rebranded as ResMed ReSupply. Lawrenceville, GA Feb 2016 Brightree C